Cost before markup (cost before markup)
Cost before markup, which cost books call cost before markup, is the material and labor cost of a work item and nothing else: no contractor overhead, no profit, no supervision, no warranty risk, no general conditions. It is the floor a job cannot be built below, and it is never the price.
Cost books publish these costs because they are the stable, comparable layer. Everything above cost before markup is a business decision that varies by contractor, which is why two honest bids on identical scope can differ while both being correct.
Why should a contractor never bid at cost before markup?
Because cost before markup pays for the work and nothing else. Insurance, vehicles, estimating time, callbacks, supervision, and profit all live in the markup. A bid at cost wins the job and loses the business. Seeing the cost before markup on every line shows the floor, so the real bid is chosen deliberately instead of drifting toward the floor under pressure.
How does cost before markup relate to a grounded estimate?
A grounded estimate prices each scope line against a current, local cost reference rather than memory or a national average. The estimate then applies markup in the open. Grounding is about where the floor comes from; markup is about where the price goes.
Price your next job from the same cost data these figures come from, adjusted for where the job is. You set your markup and approve every line before you bid.
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